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Technology Stocks : Silicon Graphics, Inc. (SGI) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Jamerson who wrote (3427)	11/3/1997 12:22:00 PM
From: Mike Chen	Read Replies (1) \| Respond to of 14451

Paul Jamerson, thank you for the courtesy of your reply. I gather that you do "Technical Analysis". I might ask you why you choose a 50 week moving average which is close to two weeks shy of one year? I gather that you achieve predictive information in a non-linear system by drawing long lines. I guess that's where your "experience" kicks in. I'm still learning, so I'm kind of reduced to looking for income statement things like free cash flow, and a margin of safety in the balance sheet and store of intellectual property. To give you an idea of the kind of difficulty my approach causes me, look at the PSR's that were bandied about on this thread several months ago. SGI's is <1, INTC is >7. The PSR can relate PE's profit margins. It would appear that INTC needs to stay at the top of its game to maintain its stock price. Any improvement in SGI's business model should go right to the bottom line. The risk is that SGI has old technology, and will go belly up. At this point SGI needs management. INTC may have slipped over the bleeding edge. Merced appears to be vapor at this time. Epic is physically doable, but requires innovative compiler support. Smart people tell that these are nasty problems that are not easily solved. Intel's a wonderful company, but appears to be ladling out huge clouds of FUD while they try to solve this problem. Meanwhile their free cash flow goes into building 'smokestack' plants and share buy backs. Which goes back to a stock price that appears to be relatively over-priced using Graham-Dodd criteria for 'smokestack' industries. I'd love to simplify my life and use 50 day lines, but I can't seem to shake the story this guy Buffett from Nebraska tells about Mr. Market the manic depressive who stumbles in daily to give you a price on your business. I have a difficult time taking advice from a schizophrenic when it comes to investments. I hope you will continue to share your wisdom. Mike